STAFF REPORT
City of Lancaster
CC 14
6/23/2026
TN
Date: June 23, 2026
To: Mayor Parris and City Council Members
From: Trolis Niebla, City Manager
George Harris, Senior Director / Treasurer – Administrative Services Subject: Fiscal Year 2026-2027 Budgets
City Council and City Council acting as Lancaster Housing Authority and Lancaster Power Authority Recommendations:
1. Adopt Resolution No. ____, adopting the proposed City of Lancaster Fiscal Year 2026- 2027 General Fund Operating Budget and Special Funds Budget.
2. Adopt Resolution No. ____, establishing the annual Appropriations Limit for Fiscal Year 2026-2027.
3. Adopt Resolution No. ____, approving terms and conditions of employment and a compensation schedule for represented and non-represented regular and probationary employees of the city – Salary Schedule.
4. Approve the Vendor Expenditure Authority List for FY2026-2027 Fiscal Impact:
The City of Lancaster Proposed Fiscal Year 2026-2027 Budget totals $330,217,526.
Background:
City of Lancaster Budget
By July 1 of each year, the City is required to adopt a budget, which establishes appropriations and estimates revenue for the coming fiscal year. The proposed budget is a culmination of many months of work by the City Council and staff in reviewing priorities and evaluating programs, with a focus on maintaining responsive and relevant services for residents.
City Council’s priorities address:
Sound fiscal foundation and resilience;
Protect city infrastructure;
Public safety;
Measure LC appropriations;
Economic development; and
New facilities, programs, and service
All of which have been incorporated into the City’s Proposed FY 2026-2027 Budget.
The following table summarizes the proposed citywide budget:
CATEGORY FY27 PROPOSED
PERSONNEL COSTS $73,246,474
OPERATING EXPENDITURES 176,768,385
CAPITAL OUTLAY AND DEBT SERVICE 24,150,292
SHERIFF CONTRACT 25,878,042
TRANSFERS 30,174,333
Grand Total $330,217,526
Estimating revenues for the upcoming fiscal year and forecasting out-years is essential. By reviewing past years’ actual revenue receipts, new revenue sources, fee-based program and service projections, grant opportunities, and the State’s economic outlook, the City can best determine the revenues available for spending allocations. The City estimates FY 2026-2027 revenues (including transfers) of $353.1 million.
The City’s largest unrestricted funding source is the General Fund (Fund 101), totaling $147.3 million in revenues. General Fund resources include property tax, sales tax, fees, grants, and others. Sales and Use tax is the top General Fund source, which is projected at $73.2 million.
Included in that projection is Measure LC and Measure YM with $45 million of Sales and Use Tax revenue.
The proposed General Fund appropriations total $147 million, including $5.7 million in transfers out.
The City of Lancaster desires to maintain a prudent level of financial resources to guard its residents against service disruption in the event of unexpected, temporary revenue shortfalls or unanticipated expenditures. Reserves accumulated during years when revenues exceeded expenditures cushioned the City’s transition to a lower revenue base and allowed the City to adjust spending in response to economic downturns, emergencies, State revenue takeaways, and/or investment opportunities. The Proposed FY 2026-2027 Budget significantly recognizes and strengthens the City Council’s fiscal prudence and discipline with reserves totaling approximately $58.8 million.
The Proposed FY 2026-2027 Budget addresses community needs while maintaining healthy Reserves that will enable the City to continue providing the community with a full scope of high- quality municipal services, programs, and special events that enhance the quality of life of all Lancaster residents. It will also provide the required resources to construct significant capital improvement projects that will improve infrastructure and facilities and beautify the community.
Measure LC/YM
On November 3, 2020 and November 5, 2024, the voters of the City of Lancaster approved by the required majority vote, the increase in 3/4 - cent Transaction and Use Tax. Measure LC began on April 1, 2021 and Measure YM began April 1, 2025. The sales tax is expected to generate approximately $45 million in General Fund revenue in the fiscal year 2026/27.
The Measure LC/YM committee identified that the priority for the use of Measure LC funds shall be as follows:
1. Life Safety;
2. Public Safety;
3. Quality of Life; and
4. Sound Fiscal Foundation/Support
The following list are programs funded by both the sales tax initiatives.
Attachments:
a. Resolution No. ____ Adopting City FY26-27 Budget
b. Resolution No. ____ Appropriations Limit-FY27
c. Resolution No. ____ Salary Schedule FY26-27
d. Vendor Expenditure Authority List for FY 2026-2027
City of Lancaster Proposed Fiscal Year 2026-2027 Budget (available on the City’s website)